Shares in Perth-based Galena Mining leapt 27% to $1.22 at one stage yesterday after it confirmed that it has a significant high grade lead and silver find in the Gascoyne region of WA.
Galena shares went into a trading halt on Tuesday ahead of the release of yesterday’s report. The shares ended the session yesterday up 20% at $1.155.
The shares rose sharply as investors realised that the company had the largest lead and silver deposit in the country for a number of years, at a time when lead prices have risen by around $US1,000 a tonne in the past two years as the electric vehicle boom gathers pace.
The company told the ASX (http://www.galenamining.com.au/market/asx-annoucements/) that it had outlined what it called “a new world class resource” at its 100% owned Abra lead-silver project.”
“Abra is a significant, world-class undeveloped lead-silver deposit with in excess of 4 million tonnes contained lead defined,” Galena said in yesterday’s statement. The mine, if developed, will be an underground operation.
"Abra is a very large deposit with zonation at depth transitioning from dominant lead-silver type in the upper zones (which starts at approximately 230 vertical metres below surface) to a copper-gold style deposit at depth. There is some overlap in mineralisation styles.”
"The deposit is sedimentary hosted replacement style with the upper sections dominated by stratabound lead-silver horizons that dip shallowly to the south. These horizons are fed by steeper dipping vein dominant mineralised zones that again contain high grade lead and silver but can also contain zinc and copper and gold at depth,” the company revealed.
Galena said this followed an 8,000 metre drilling program that ended last December which had revealed indicated and inferred reserves totalling 11.2 million tonnes of ore at 10.1% lead and 28 grams of silver to the tonne.
This was made up of an indicated resource of 5.3 million tonnes of ore at 10.6% lead and 28 grams of silver to the tonne, and an inferred resource of 5.9 million tonnes of ore at 9.7% lead and 29 grams of silver (using a 7.5% lead cut off).
As well, Galena said these reserves were “within” was an indicated resource (a lower level of assurance) of 13.2 million tonnes of ore at 7.9% lead and 19 games to the tonne of silver and a further 23.5 million tonnes of ore at 6.9% lead and 17 grams of silver to the tonne (using a 5% lead grade cut off).
All up Galena said the Abra deposit, had, at the moment 36.6 million tonnes of ore at 7.3% lead and 18 grams of silver to the tonne
Galena CEO, Ed Turner said in yesterday’s statement:
“These resource numbers have exceeded our expectations and confirm Abra as a truly world class asset with global significance in the lead market. What is even more exciting for the Company and its shareholders is that this looks like just the beginning of a much bigger project and that potential upside exists in and around where we have drilled to date.
"We have a clear strategy to bringing Abra on line as one of Australia’s next base metals producers and our focus now is progressing a robust Pre-Feasibility Study over the coming months.”
On top of the lead and silver outlined, Galena said the “extensive” gold and copper mineralisation was noted but had not been worked up into a resource.
Galena added “Significant copper and gold intersections occur at depth within the vein mineralisation. These include: 4 metres @6.3% copper and 0.2 grams to the tonne gold from 716 metres (incouding one metre @ 10.5% copper), and 8 metres @5.8 grams to the tonne gold and 1.0% copper from 506 metres incouding 1 metre at 15 grams of gold to the tonne.
The company says it is now moving to a pre-feasibility stage to work out a full feasibility program for the project. "Demand for lead continues to rise with the price as of Monday 12th March of US$2,342/t (A$2,974). In January 2018 lead hit its highest price since 2011 driven by lower stockpiles and increasing consumption and the lead price has increased by more than US$1,000/t (60%) in the last two years,” Galena said in yesterday’s statement.
That is s flowing from what the company said was "The primary use of lead is within batteries with over 75% of lead demand utilised in lead-acid batteries, in vehicles and for solar power storage. Most of today’s hybrid vehicles contain lead-acid batteries as well as lithium-ion batteries and this is expected to grow in line with the EV expansion around the world.”
